US Escalates Tension with Beijing after Imposing New Sanction on Chinese Tech Giant Huawei

By Staff, Agencies

The US government imposed new restrictions on Chinese tech giant Huawei on Friday, severely limiting its ability to use American technology to design and manufacture semiconductors produced for it abroad.

US Commerce Secretary Wilbur Ross said Friday that the move aims to prevent Huawei from making a run around existing US sanctions.

“There has been a very highly technical loophole through which Huawei has been able to in effect use US technology,” Ross told Fox Business. “We never intended that loophole to be there.”

Trump administration officials have been concerned for several months that US chipmakers were selling their designs to be assembled offshore, before being sold on to Huawei.

The new rule prevents any company from selling to Huawei without a license if the product they are selling has been designed or made using US-produced technology or hardware.

Adam Segal, a senior fellow at the Council on Foreign Relations, said the move “looks like a victory for the people who really want to drive the nail, or what they think will be the nail, in Huawei’s coffin,” said.

Beijing, for its part, has urged the United States to draw a line under what it calls the "unreasonable suppression of Huawei and Chinese enterprises" following Washington's announcement of new export controls to restrict the tech giant's access to American semiconductor technology.

"The Chinese government will firmly uphold Chinese firms' legitimate and legal rights and interests", the Ministry of Foreign Affairs said in a statement Saturday, fuming that the Trump administration's actions "destroy global manufacturing, supply, and value chains".

Meanwhile, China’s Global Times said Beijing was ready to put US companies on an “unreliable entity list,” as part of countermeasures in response to the new limits on Huawei.

The measures include launching investigations and imposing restrictions on US companies such as Apple Inc, Cisco Systems Inc and Qualcomm Inc, as well as suspending purchases of Boeing Co airplanes, the report said here citing a source.

Huawei has been under relentless pressure from the Washington, which has lobbied allies worldwide to avoid the company’s telecom gear over security concerns, in the shadow of a wider US-China trade conflict.

Washington last year said it would blacklist Huawei from the US market and from buying crucial American components, though it has extended a series of reprieves to allow US businesses that work with Huawei time to adjust. On Friday it extended this reprieve by another 90 days.